Determinants of Corporate Social Responsibility Disclosure by Turkish Insurance Companies

Year 2020, Volume: 17 Issue: 1, 53 - 64, 29.06.2020

Fatma Bulut Sürdü Arzu Özsözgün Çalışkan

Abstract

The aim of this study is to empirically examine the determinants of corporate social responsibility disclosure practices by Turkish insurance companies. For this purpose, the annual reports of insurance companies are analysed. In order to examine the determinants of insurance companies’ corporate social responsibility disclosure, two independent variables, namely, return on assets and leverage, and three control variables are included in the study, namely, size, age and listing status of the company. Panel data analysis is employed using 54 insurance companies’ data on the period of 2009-2017. Our findings indicate that leverage, firm size, age and listing status have effect on insurance companies’ social responsibility disclosure.

Keywords

Corporate social responsibility, Annual Reports, Insurance Companies, Developing Country, Turkey

References

• Adams, C. A., Hill, W. Y., & Roberts, C. B. (1998). Corporate social reporting practices in Western Europe: legitimating corporate behaviour?. The British Accounting Review, 30(1): 1-21.
• Ahmed, K., & Courtis, J. K. (1999). Associations between corporate characteristics and disclosure levels in annual reports: a meta-analysis. The British Accounting Review, 31(1): 35-61.
• Alfraih, M. M. (2016). The effectiveness of board of directors’ characteristics in mandatory disclosure compliance. Journal of Financial Regulation and Compliance. 24(2): 154-176.
• Archel, P., Husillos, J., Larrinaga, C., & Spence, C. (2009). Social disclosure, legitimacy theory and the role of the State. Accounting, Auditing and Accountability Journal, 22(8): 1284–1307.
• Bayoud, N. S., Kavanagh, M., & Slaughter, G. (2012). Factors influencing levels of corporate social responsibility disclosure Libyan firms: A mixed study. International Journal of Economics and Finance, 4(4): 13-29.
• Bowen, G. A. (2009). Document analysis as a qualitative research method. Qualitative Research Journal, 9(2): 27-40.
• Branco, M. C., & Rodrigues, L. L. (2008). Social responsibility disclosure: A study of proxies for the public visibility of Portuguese banks. The British accounting review, 40(2): 161-181.
• Castelló, I. & Lozano, J. (2009). From risk management to citizenship corporate social responsibility: Analysis of strategic drivers of change. Corporate Governance, 9(4): 373–385.
• Choi, J. S. (1999). An investigation of the initial voluntary environmental disclosures made in Korean semi-annual financial reports. Pacific Accounting Review, 11(1): 73-103.
• Das, S.C. (2013). Corporate Social Reporting and Human Resource Disclosures: Experiences from Insurance Companies in India. Social Responsibility Journal, 9(1): 1-16.
• Dierkes, M., & Antal, A. B. (1985). The usefulness and use of social reporting information. Accounting, Organizations and Society, 10(1): 29-34.
• Ferguson, M. J., Lam, K. C., & Lee, G. M. (2002). Voluntary disclosure by state‐owned enterprises listed on the stock exchange of Hong Kong. Journal of International Financial Management and Accounting, 13(2): 125-152.
• Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Boston: Pitman
• Gamerschlag, R., Möller, K., & Verbeeten, F. (2011). Determinants of voluntary CSR disclosure: empirical evidence from Germany. Review of Managerial Science, 5(2-3): 233-262.
• Garg, M. C., & Kumar, S. (2019). The Relationship Between Human Resource Disclosure and Company Characteristics: A Study on Indian Companies. IUP Journal of Applied Finance, 25(4): 28-47.
• Giannarakis, G. (2014). The determinants influencing the extent of CSR disclosure. International Journal of Law and Management, 56(5): 393-416.
• Gray, R., Kouhy, R., & Lavers, S. (1995). Corporate social and environmental reporting. Accounting, Auditing and Accountability Journal, 8(2): 47-77.
• Hausman, J.A. (1978). Specification Tests in Econometrics. Econometrica, 46(6): 1251–1271.
• Hazine ve Maliye Bakanlığı (HMB), 2018 Yılı Türkiye’de Sigortacılık ve Bireysel Emeklilik Faaliyetleri Hakkında Rapor. Accessed at:https://www.hmb.gov.tr/sigortacilik-ve-ozel-emeklilik-raporlari#, 7 January 2020.
• Ismail, K. N. I. K., & Ibrahim, A. H. (2008). Social and environmental disclosure in the annual reports of Jordanian companies. Issues in Social and Environmental Accounting, 2(2): 198-210.
• Khan, A., Muttakin, M.B. & Siddiqui, J. (2013), Corporate governance and corporate social responsibility disclosures: Evidence from an emerging economy. Journal of Business Ethics, 114(2): 207-223.
• Khemir, S., & Baccouche, C. (2010). Analysis of the determinants of corporate social responsibility disclosure in the annual reports of Tunisian listed firms. Research in Accounting in Emerging Economies, 10(1): 119-144.
• Kiliç, M., Kuzey, C., & Uyar, A. (2015). The impact of ownership and board structure on Corporate Social Responsibility (CSR) reporting in the Turkish banking industry. Corporate Governance, 15(3): 357-374.
• KPMG Global Sustainability Services. (2017). International survey of corporate responsibility reporting 2017, Accessed at:https://assets.kpmg/content/dam/kpmg/be/pdf/2017/kpmg-survey-of-corporate-responsibility-reporting-2017.pdf, 21 January 2020.
• Lanis, R. & Richardson, G. (2013), Corporate social responsibility and tax aggressiveness: a test of legitimacy theory. Accounting, Auditing and Accountability Journal, 26(1): 75-100.
• Lodhia, S. K. (2004). Corporate environmental reporting media: A case for the world wide web. Electronic Green Journal, 1(20). Accessed at:https://escholarship.org/uc/item/20d3x61r, 7 January 2020.
• Lourenço, I. C., Callen, J. L., Branco, M. C., & Curto, J. D. (2014). The value relevance of reputation for sustainability leadership. Journal of Business Ethics, 119(1): 17-28.
• Lucchini, A., & Moisello, A. M. (2017). CSR Disclosure, Visibility and Media Pressure International Evidence from the Apparel and Textile Industry. European Journal of Economics, Finance and Administrative Sciences, 93: 5-28.
• Macintosh N.B. (1990) Annual Reports in an Ideological Role: A Critical Theory Analysis. In: Cooper D.J., Hopper T.M. (eds) Critical Accounts. Palgrave, London.
• Malafronte, I., Starita, M. G., & Pereira, J. (2018). The effectiveness of risk disclosure practices in the European insurance industry. Review of Accounting and Finance, 17(1): 130-147.
• Md Zaini, S., Sharma, U., Samkin, G., & Davey, H. (2020, January). Impact of ownership structure on the level of voluntary disclosure: a study of listed family-controlled companies in Malaysia. Accounting Forum, 44(1): 1-34.
• Menassa, E. (2010). Corporate Social Responsibility an exploratory study of the quality and extent of social disclosures by Lebanese commercial banks. Journal of Applied Accounting Research, 11(1): 4-23.
• Mishra, S. K., Devi, A., & Gupta, A. (2015). Voluntary Disclosure of Human Capital: Evidence from India. IUP Journal of Corporate Governance, 14(4): 47-62.
• Moreno, A. & Cámara, M. (2016) Stakeholders in annual reports under ownership concentration: a historical case of a Spanish brewery company, Accounting History Review, 26(2): 57-81.
• Muttakin, M. B., Mihret, D. G., & Khan, A. (2018). Corporate political connection and corporate social responsibility disclosures. Accounting, Auditing and Accountability Journal, 31(2): 725-744.
• Obalola, M. (2008). Beyond philanthropy: corporate social responsibility in the Nigerian insurance industry. Social Responsibility Journal, 4(4): 538-548.
• Olowokudejo, F., Aduloju, S.A. & Oke, S.A. (2011), Corporate social responsibility and organizational effectiveness of insurance companies in Nigeria. The Journal of Risk Finance,12(3): 156-167.
• Porter, M. E., & Kramer, M. R. (2006). The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(12): 78-92.
• Rahman, N. H. W. A., Zain, M. M., & Al‐Haj, N. H. Y. Y. (2011). CSR disclosures and its determinants: evidence from Malaysian government link companies. Social Responsibility Journal, 7(2): 181-201.
• Reverte, C. (2009). Determinants of corporate social responsibility disclosure ratings by Spanish listed firms. Journal of Business Ethics, 88(2): 351-366.
• Roberts, R. W. (1992). Determinants of corporate social responsibility disclosure: An application of stakeholder theory. Accounting, Organizations and Society, 17(6): 595-612.
• Scholtens, B. (2011). Corporate social responsibility in the international insurance industry. Sustainable Development, 19(2): 143-156.
• Scholtens, Bert. (2009). Corporate Social Responsibility in the International Banking Industry. Journal of Business Ethics. 86: 159-175.
• Sharma, R. & Sharma, M. (2011), Attitude of the youth towards corporate social responsibility in India: a study of Jalandhar district, The IUP Journal of Management Research,10(1):7-27.
• Smith, J. L., Adhihari, A., & Tondkar, R. H. (2005). Exploring Differences in Social Disclosures Internationally: A Stakeholder Perspective, Journal of Accounting and Public Policy, 24 (2): 123–151.
• Suher, İ. (2010). Zirvedeki Türk işletmelerinin kurumsal sosyal sorumluluk iletişimi: web sitelerine yönelik bir inceleme. Selçuk Üniversitesi İletişim Fakültesi Akademik Dergisi, 6(2): 33-48.
• Tagesson, T., Blank, V., Broberg, P., & Collin, S. O. (2009). What explains the extent and content of social and environmental disclosures on corporate websites: a study of social and environmental reporting in Swedish listed corporations. Corporate Social Responsibility and Environmental Management, 16(6): 352-364.
• Ullah, M., Muttakin, M. & Khan, A. (2019). Corporate governance and corporate social responsibility disclosures in insurance companies. International Journal of Accounting and Information Management,27(2): 284-300.
• Watts, R. L. & Zimmerman, J. L. (1986). Positive Accounting Theory. Prentice-Hall, Englewood Cliffs, NJ.
• Wooldridge, J.M. (2002). Econometric Analysis of Cross Section and Panel Data. Cambridge, MA: MIT Press.
• Young, S., & Marais, M. (2012). A multi‐level perspective of CSR reporting: The implications of national institutions and industry risk characteristics. Corporate Governance: An International Review, 20(5): 432-450.
• Zaid, M. A., Wang, M., & Abuhijleh, S. T. (2019). The effect of corporate governance practices on corporate social responsibility disclosure. Journal of Global Responsibility. 10(2): 134-160.